Financial Reintermediation

In the 1970s, financial disintermediation occurred  when investors left the safety of bank deposits for higher yielding money market mutual funds (MMMFs). Recently, the SEC has been in discussions about possible changes to the structure and regulation of MMMFs, which has helped lead to financial reintermediation, that is the increased use of bank deposits. In the recent 2012 AFP Liquidity Survey, 74 percent of corporate short-term assets are in bank deposits, MMMFs, and U.S. Treasury bills. Interestingly, since 2006, the percentage of short-term assets in bank deposits has increased from 23 percent of short-term investments to 51 percent.  http://www.afponline.org/liquidity/